‘Second Look’ Program to Expand Mortgage Modifications
A new Second Look Program from the Mortgage Insurance Companies of America (MICA) may provide help to troubled home owners who are not able to qualify for federal assistance under the Obama Administration’s Making Home Affordable program.
Making Home Affordable, announced in March, helps home owners at risk of losing their homes to modify their mortgages by reducing the monthly payment to more sustainable levels. MICA’s Second Look Program builds on the Administration’s program by providing an additional review to home owners who have been denied a modification of a loan that is not owned or guaranteed by Fannie Mae or Freddie Mac.
Lenders use a net present value (NPV) test to determine whether a non-GSE loan is eligible for a loan modification. These loans can include jumbo mortgages, loans on investors’ balance sheets or loans that have been packaged into private-label mortgage securities.
Given how some NPV models are mathematically structured, it may appear that loans that have mortgage insurance are better off going into foreclosure. To help offset these results, the Second Look Program allows lenders to send a claim that has been rejected under the NPV test to a mortgage insurer who can choose to provide an advance claim payment to help permit the loan to be modified.
Although MICA has not provided an estimate of how many home owners it expects to help under its new program, the organization, working in conjunction with loan servicers, was able to prevent nearly 100,000 people from losing their homes in 2008.
To read the press release announcing the Second Look Program, click here.
For more information, e-mail Bill Renner at NAHB, or call him at 800-368-5242 x8597.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
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Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Fall NAHB Construction Forecast Conference & Webcast on Oct. 21 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.